Correlation Between Mawer Balanced and Mawer Canadien

Can any of the company-specific risk be diversified away by investing in both Mawer Balanced and Mawer Canadien at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Mawer Balanced and Mawer Canadien into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mawer Balanced and Mawer Canadien actions, you can compare the effects of market volatilities on Mawer Balanced and Mawer Canadien and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Mawer Balanced with a short position of Mawer Canadien. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mawer Balanced and Mawer Canadien.

Diversification Opportunities for Mawer Balanced and Mawer Canadien

0.9

Correlation Coefficient

Mawer Balanced  Mawer Canadien

Almost no diversification

The 3 months correlation between Mawer and Mawer is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Mawer Balanced and Mawer Canadien actions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mawer Canadien actions and Mawer Balanced is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Mawer Balanced are associated (or correlated) with Mawer Canadien. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mawer Canadien actions has no effect on the direction of Mawer Balanced i.e., Mawer Balanced and Mawer Canadien go up and down completely randomly.

Pair Corralation between Mawer Balanced and Mawer Canadien

Assuming the 90 days trading horizon Mawer Balanced is expected to generate 1.77 times less return on investment than Mawer Canadien. But when comparing it to its historical volatility, Mawer Balanced is 1.34 times less risky than Mawer Canadien. It trades about 0.18 of its potential returns per unit of risk. Mawer Canadien actions is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  9,673  in Mawer Canadien actions on September 12, 2024 and sell it today you would earn a total of  657.00  from holding Mawer Canadien actions or generate 6.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Mawer Balanced  vs.  Mawer Canadien actions

Mawer Balanced

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mawer Balanced are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, Mawer Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Mawer Canadien actions

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Mawer Canadien actions are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, Mawer Canadien may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Mawer Balanced and Mawer Canadien

The main advantage of trading using opposite Mawer Balanced and Mawer Canadien positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mawer Balanced position performs unexpectedly, Mawer Canadien can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Mawer Canadien will offset losses from the drop in Mawer Canadien's long position.

The idea behind Mawer Balanced and Mawer Canadien actions pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.